Stock Market Commentary -
Domestic equity markets rebounded during the second quarter, bringing the year-to-date return into positive territory for the S&P 500, now up 2.6% YTD after gaining 3.4% for the quarter. Reports on year-over-year corporate profit growth, which exceeded 20% overall for S&P 500 companies, boosted markets early in the quarter. However, escalating trade tensions, jitters over rising interest rates and profit-taking pulled markets lower. $29 billion flowed out of equity mutual funds and exchange-traded funds in the last week of June. Money market funds and short-term fixed-income vehicles received net inflows during this period.
The Russell 1000 Growth index has soared 22.5% over the last year, more than three times the return of the Russell 2000 Value index, primarily driven by strength in Technology stocks. Energy stocks rallied 13.5% during the quarter as tighter global oil supply lifted oil prices. Financials and Industrials were the worst-performing sectors, each falling 3.2% as trade uncertainty pressured Industrial stocks and weak loan growth and flattening of the yield curve pushed bank stocks lower. Small cap stocks, shielded from tariffs and lifted by small business confidence, gained 8.3%. The Real Estate sector resumed strength as reflected in the DJ Wilshire REIT Index, which jumped 10%.
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